Licensing Compliance

Licensing Compliance

One of the most important sectors of the cannabis industry is cultivation. As the starting point for the industry, cultivation has been broken down into 13 different state issued license types. Furthermore, several government agencies are tasked with regulating various aspects of the cultivation process.

Currently, manufacturing is separated into two different licensing types. The first type is volatile manufacturing, which involves the use of combustable or volatile chemicals. The second type deals with non-volatile substances and is generally considered not as dangerous or hazardous to work with.

Testing plays an integral role in the way that commercial cannabis will be grown and sold in California. Although recent changes have relaxed some of the testing requirements, testing still remains one of the most important aspects of the newly developed cannabis regulatory scheme.

Distributors are the essential connection between the cultivation and manufacturing side of the industry and the retail businesses. Retail, which includes delivery services, is the driving force of marijuana sales and the collection of taxes related to the industry.

CULTIVATION

The cultivation type licenses provide the greatest amount of information as to what kind of requirements and restrictions each license type will likely have. The different cultivation license types are grouped based on the size of the cultivation site. Explore the options below to help determine which option is most fitting for your plans.

Type 1 - Specialty

Type 1, or “specialty outdoor,” – Outdoor cultivation using no artificial lighting of less than or equal to 5,000 sq. ft. of canopy size on one premises, or up to 50 mature plants on non-contiguous plots.

Type 1B, or “specialty mixed-light,” – Cultivation using a combination of natural and supplemental artificial lighting between 2,501 and 5,000 sq. ft. of canopy size on one premises.

Type 1C, or “specialty cottage,” – Cultivation using a combination of natural and supplemental artificial lighting with 2,500 sq. ft.or less of total canopy size for mixed-light cultivation, up to 25 mature plants for outdoor cultivation, or 500 sq. ft. or less of canopy size for indoor cultivation, on one premises.

Type 2 - Small

Type 2, or “small outdoor,” – Outdoor cultivation using no artificial lighting between 5,001 and 10,000 sq. ft., inclusive, of total canopy size on one premises.

Type 2A, or “small indoor,” – Indoor cultivation using exclusively artificial lighting between 5,001 and 10,000 sq. feet, ft., of total canopy size on one premises.

Type 2B, or “small mixed-light,” – Cultivation using a combination of natural and supplemental artificial lighting between 5,001 and 10,000 sq. ft., inclusive, of total canopy size on one premises.

Type 3 - Medium

Type 3, or “outdoor,” – Outdoor cultivation using no artificial lighting from 10,001 sq. ft. to 1 acre, inclusive, of total canopy size on one premises.

Type 3A, or “indoor,” – Indoor cultivation using exclusively artificial lighting between 10,001 and 22,000 sq. ft. inclusive, of total canopy size on one premises.

Type 3B, or “mixed-light,” – Cultivation using a combination of natural and supplemental artificial lighting, between 10,001 and 22,000 sq. ft., inclusive, of total canopy size on one premises.

Note: The Department of Food and Agriculture shall limit the number of Type 3 licenses allowed to be issued.

Type 4 - Nursery

Type 4 or “Nursery” – Produces only clones, immature plants, seeds, and other agricultural products used specifically for the propagation and cultivation of cannabis.

Type 5 - Large

Type 5, or “outdoor,” – Outdoor cultivation using no artificial lighting greater than 1 acre, inclusive, of total canopy size on one premises.

Type 5B, or “mixed-light,” – Cultivation using a combination of natural and supplemental artificial lighting greater than 22,000 sq. ft., inclusive, of total canopy size on one premises.

Note: No Type 5, Type 5A, or Type 5B cultivation licenses may be issued before January 1, 2023.

MANUFACTURING

NON-VOLATILE

Type 6
Manufacturing Level 1

Manufacturing which involves the use of non-volatile chemicals during the extraction process are “Non-Volatile” under the manufacturing type license.

Examples of non-volatile chemicals include:

– Butter/Oil
– Glycerin
– Carbon Dioxide

VOLATILE

Type 7
Manufacturing Level 2

Manufacturing which involves the use of volatile chemicals during the extraction process are considered “Volatile” under the manufacturing type license.

Examples of volatile chemicals include:

– Butane
– Acetone
– Alcohol

TESTING

A laboratory, facility, or entity in the state that offers or performs tests of cannabis or cannabis products and that
is both: (1) Accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity in the state; and (2) Licensed by the bureau.

Test for:

(A) Tetrahydrocannabinol (THC).

(B) Tetrahydrocannabinolic Acid (THCA).

(C) Cannabidiol (CBD).

(D) Cannabidiolic Acid (CBDA).

(E) The terpenes required by the bureau in regulation.

(F) Cannabigerol (CBG).

(G) Cannabinol (CBN).

(H) Any other compounds or contaminants required by the bureau

1

Distribution

As the transporter of cannabis products from one license holder to another, distributors play an important role in connecting the cannabis distribution chain. Distributors are the only license type allowed to regularly deliver marijuana from business to business.

Bonded & Insured

Secured Transportation

Maintain accurate delivery records

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Retail

As the providers of marijuana to consumers, retail businesses operate in a lucrative yet competitive market. Due to consumer safety concerns, retail locations are subject to strict zoning and security requirements.

Physical store (can be closed to the public)

Delivery to consumers

Technology retail platforms

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Microbusiness

A unique type of license which allows businesses to be able to operate under multiple license types. Microbusiness licenses allow a company to simultaneously operate a cultivation, distribution, manufacturing and retail business under the same license.

Cultivation limited to 10,000 sq. ft.

Manufacturing limited to Type 1 (non-volatile)

Prohibited from operating a testing laboratory

Maintenance

Licenses issued through the State of California will require an annual renewal in order for the license to stay valid. While to many cities and counties across California are expected to establish renewal procedures similar or identical to California’s process, because each locality has the ability to control certain aspects of the legalities of the cannabis industry, it is essential to have reliable and up to date source for regulatory compliance. Let California Weed Law take care of upcoming deadlines and requirements that need to be met in order to be eligible to renew a state or local issued license.

Appeals

Since the legalization of recreational cannabis through the Adult Use of Marijuana Act, California has maintained its position that the state cannabis application process will take into consideration sensible approach of taking various factors into consideration when determining whether or not to issue a marijuana license. Have California Weed Law help represent you during an appeal of a denied local or state cannabis application.